SURS Actuarial Assumptions and Benefit Provisions Used in Tier II Calculations

Tier II – Traditional Plan Tier II – Portable Plan RSP*
Defined Benefit (DB) Plan
Benefit Multiplier 2.20% 2.20% NA
Final Average Period 8 Years 8 Years
Maximum Benefit 80% of FAC 80% of FAC NA
Employee Contribution 8.00% 8.00% NA
Interest Crediting Rate – Pre-retirement/Termination 4.50% 6.50% NA
Annuitization Interest Rate for Lump Sums 5.00% 5.00% NA
Defined Contribution Plan
Employee Contribution NA NA 8.00%
Employer Contribution** NA NA 7.35%
Assumed Return – Pre-retirement/Termination NA NA 6.00%
Annuitization Interest Rate for Lump Sums NA NA 5.00%
Mortality Same as Valuation, unisex mortality 45%/55% male/female, year of birth for generational mortality based on age in 2050
Benefit Commencement Age* 67 67 67
COLA 1.125% Same as Traditional Plan when converting lump sums in the RSP to a monthly benefit for the purpose of comparing to the Traditional Plan benefit.
Joint and Survivor Percentage 66.67%
Survivor Age Same as member
Pay Assumptions
Member Pay Increase Assumption Same as Valuation – 12.25% in first year graded down to 3.25% at 34 YOS
2020 Pay Cap $115,929 $115,929 $285,000
Pay Cap Increase Assumption 1.125% 1.125% 3.250%

*Benefits are assumed to begin at the later of the assumed benefit commencement age and age at termination/retirement.

**0.25% of pay from 7.60% RSP employer contribution used to fund disability benefits

Because of the higher assumed interest crediting rate/rate of investment return, the Portable Plan (lump sum) is projected to provide a higher benefit that the RSP for members whose pay is under the pay cap. Members must elect an annuity in order to receive retiree healthcare. If an annuity is elected from the Portable Plan, the Traditional Plan and the Portable Plan will provide the same benefit amount. However, the Traditional Plan will provide a 66.67% J&S benefit for married participants and a refund of survivor contributions for unmarried participants. In most cases, the RSP is projected to provide higher benefit amounts to members whose pay is higher than the Tier II pay cap.